Practical Oil Trading

This course is designed to provide you with a practical introduction to oil products, oil trading, market participants and fundamentals such as pricing. Additionally, you will gain a detailed insight into risk management, trading strategies and derivatives.

Course Highlights

Attend this intensive two-day course and acquire practical insight into:

The working processes in the oil industry: covering upstream, midstream and downstream
How refineries and refinery processes work
The nuances of international oil markets, products traded within them and the applications of those products
The practicalities of oil pricing, benchmarks and indices
A whole host of trading techniques, get to grips with the various methods and applications
The inner workings of oil trading platforms (exchanges)
Risk management techniques in oil trading, learn how to identify, measure and control those risks
What the future may hold for the oil markets

For details of the course trainer, please download the course brochure

Booking Information

Dates	Prices	Book This Course	Discount
18 - 19 Nov 2010	£ 2299		-
04 - 05 Apr 2011	£ 2299		-

Course Programme

Introduction to the Oil Industry

Sectors

Upstream
Midstream
Downstream

Features of crude oil

Sweet vs. sour
Light vs. heavy

Global benchmarks

WTI
Brent (Dated Brent, BFOE)
Dubai quality

Reserves & Technique

Peak-oil theory
Tar sands & oil shale

Transport
Geo-politics
Environmental issues

The Refinery Process

Refining

Refinery products

Types of refineries
The construction of refineries
Where should they be located?
How the quality of crude
influences the relative output of
derivatives
The value of refinery products
The competition with bio-fuels

Crack spreads

5:3:2
3:2:1
2:1:1

Oil Pricing

Benchmarks & indices
Fundamental price drivers

Geographical spreading
Quality
Reserves
Currency of denomination
Production (capacity)
Consumption
Transport & infrastructure
Weather
Seasonality
Geo-politics

Oil Trading

Working of the oil markets
Market participants
The role of cartels (OPEC)
Contract specifications

Trading unit
Price quotation
Trading months
Trading at Settlement (TAS)
Alternative Delivery Procedure (ADP)
Exchange of Futures for
Physicals (EFP)
Trading & position limits
Physical vs. financial settlement
Deliverable grades

Structuring of contracts
Physical delivery vs. cash settlement
Trading

Bilateral transactions
Bunker trading

~ Rotterdam
~ Houston
~ Singapore
~ Fujeirah

OTC vs. Exchange Trading

OTC markets

Credit risk

Exchange trade

NYMEX
ICE
DME

~ Listed products
~ Futures
~ Options
~ Swaps
~ Crack spreads

Integration of OTC markets & exchanges

OTC give up facility

Trading & Risk

Markets
Products
Trading

Hedging
Arbitrage
Speculation (proprietary trading)

Management issues

The increasing importance of trading floors and dealing rooms
The increasing role of proprietary trading

Risk Management

Identification of risk types & kinds

Operational risk
Credit risk
Market risk

Measuring risk

Value at Risk
Controlling risk
Hedging

Hedging Tools & Strategies

Tools

Derivatives

~ Futures
~ Options
~ Swaps

Strategies

Natural counterparties
Long term vs. short term hedging
Frequent mismatches
Caps
Floors
Collars

Agreements & conditions

Alternative Delivery Procedure (ADP)
Trading at Settlement (TAS)
Exchange for Physicals (EFP)

Collateral & margin
Clearing & settlement (cash or physical)

Volatility

What is volatility?
Historical volatility, future volatility & implied volatility
How is volatility measured?
What does volatility imply?
Volatility as input for pricing options
Skew & Kurtosis

Spread Trading

Correlation
Pairs & proxies
Forward curves

Backwardation
Contango
Convenience yield

Curve trading & arbitrage
Spread trading

Quality spreads
Location spreads (basis trading)

Cross margining